overview
- Microsoft stock (MSFT) rose modestly during Friday trading, but fell more than 8% in June, one of its worst months in years.
- This decline is largely due to concerns about Microsoft’s heavy spending on artificial intelligence, in which it plans to invest nearly $190 billion this year.
- Despite the slump in stock prices, Microsoft’s business remains strong, with total revenue of $82.9 billion in the third quarter of 2026, and more than $54 billion from its cloud business.
- Experts see the current stock price as a buying opportunity, citing strong demand for AI and a large backlog as indicators of future growth.
During Friday’s US trading session, Microsoft stock (MSFT) maintained the mild bullish trend of the previous session and still showed some gains. Despite the modest rise, the stock was down more than 8% in June, which was seen as one of the worst months in years.
The main reason for the strong downward trend can be attributed to continued concerns over Microsoft’s massive spending on artificial intelligence. Microsoft is doing this to create better artificial intelligence systems. This is evidenced by the company’s latest plans, which reveal that it plans to spend nearly $190 billion this year on new data centers, powerful computers called GPUs, and other AI tools.
Although this huge expenditure is considered bad for the company in the short term, it will help the company grow and strengthen in the long term.
During the most recent quarter, Microsoft spent $37.5 billion on AI, a 66% increase over the same period last year. This big difference is due to the increased price of memory chips as many companies seek them for AI.
Microsoft’s business is growing steadily
Despite the stock price decline so far, Microsoft’s business is doing very well. This is evidenced by its strong latest quarter (3QFY26) earnings report, which revealed that the company earned $82.9 billion in total sales. On the other hand, the cloud business performed well, earning more than $54 billion. This was nearly 29% higher than the same period last year.
Additionally, the Azure cloud portion has grown rapidly as many large enterprises are using Microsoft AI tools. More than 80% of large U.S. companies use these AI services. Not only that, but the company reported strong non-GAAP earnings per share of $4.27, up 18% to 21% year-over-year. Meanwhile, the company’s operating profit also increased significantly. Despite investing heavily in AI, the company is still making healthy profits and growing its business.
On the other hand, the company has a huge number of orders from customers and the demand is so high that it cannot fulfill them right away. This is expected to continue to drive strong sales growth in the coming months and years.
Many experts still like Microsoft
However, many experts believe this is a good buying opportunity. The current stock price looks cheap compared to the company’s strong business. Technical signs indicate potential oversold stock, meaning it has fallen too far and could rise soon. Microsoft boss Satya Nadella says the spending will pay off in the long run because demand for AI is so high. The company has a huge amount of orders and cannot build fast enough to meet all requests.
Arslan Butt
Lead Market Analyst – Multi-Asset (FX, Commodities, Crypto)
Arslan Butt serves as Principal Commodity and Index Analyst and brings a wealth of expertise to this area. With an MBA in Behavioral Finance and actively progressing towards a PhD, Arslan has a deep understanding of market dynamics. His professional background includes significant roles as a senior analyst at a major brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept at educating others, Arslan has a commendable track record as a lecturer and public speaker. His incisive analysis, especially in the area of cryptocurrencies and foreign exchange markets, has been featured in reputable financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, cementing his reputation in the financial community.
